‘Nigeria’s total dependence on oil suicidal’

Imagine waking up one day to discover that Nigeria’s oil wells have dried up or that all her customers now produce oil or that fossil fuel is no longer to be used in order to save our planet! What does Nigeria’s future look like when this happens? How can Nigeria transition from fossil fuel to clean energy? These and more were the questions the Green Deal Nigeria (GDN) team, an initiative of the Heinrich Boll Foundation, sought to answer at a recent Press conference in Lagos to intimate the Press on what GDN is all about.

The event featured three presenters – Bloggers Japheth Omojuwa, Mercy Banku Abang-Asu and Azeenarh Mohammed who spoke on different aspects of the economy and the way forward.

Japheth Omojuwa who spoke on Nigeria’s oil sector decried a situation where Nigeria spends whatever accrues from oil instead of using it as a seed to grow the economy. “We should use whatever we get from oil as a form of seed to develop our agriculture, renewable energy, etc.”

Oil sector losses:

He said that in 2009, Nigeria got $25b from oil instead of about $86b, because “we sold crude worth about $86b but we were only able to access $25b because of certain factors which include a defective tax process, middlemen, swop etc.

Said Omojuwa; “The Federal Inland Revenue Service (FIRS) does not have the capacity to tax these multinational companies. They go to them to ask them what their production is, and based on that, they are taxed.

“NNPC is supposed to make as much as $5b – $7b from sale of crude in Nigeria, but it loses money instead. Algeria’s Sonatrac made about $2.5b while NNPC lost about $2.5b. Thirdly, we deal with marketers in the sale of crude which means that some of the money they are making, we as a people should have been making.

“There is also the swop issue. Conventionally, it is not bad if what we swop is very low quality crude for refined products like some countries do. But we swop the best crude in the world for refined products so we are losing money. There is also corruption and inefficiency in the process. Again, we don’t have the platforms. For over 50 years of oil production, we are unable to supply the major technical know-how and the platforms so they are left for the multinationals.”

When the oil wells dry up:

Omojuwa maintained that even if Nigeria’s oil wells don’t dry up, certain realities will occur. “Right now, China, our potential biggest customer, has abundance of shale gas. US, our biggest customer, is decreasing its import and it has been shown that US will surpass Saudi Arabia in oil production by 2020. If other countries have options and oil is being discovered in other parts of Africa, it will no longer be as politically powerful as it is today.

There is also the issue of climate change. The argument for the planet to be responsible for its climate has been increasing for obvious reasons. Last year, Nigeria experienced one of its worst flooding in over 50 years and this year, there are expectations that it will be more, so it means that as a planet, whether we like it or not, our need to survive means we have to look for alternatives.”

PIB and gas flaring:

He said that gas flaring is costing Nigeria about $2.5b “so if we are able to tap it, we will be getting as much as $2.5b.” He regretted that the current PIB is not taking care of this problem.

The Director, Nigeria & West Africa Office of Heinrich Boell Foundation, Christine K harped on the need for the gas issue to be resolved or else “the National Gas Company which has no interest in regulating the sector, will be run like the NNPC.”

Omojuwa advised that market forces should be allowed to determine what happens in the oil sector like in telecom sector, noting that the only thing the telecom sector did wrong was the the non-production of phones in Nigeria.

“We propose that there should be a federal energy commission to take care of all our energy needs which will be linked with the Ministry of Environment because everything that happens in this industry affects the environment so you have one holistic approach to energy development.”

Agriculture/Climate change:

Mercy Abang-Asu dwelt on Agriculture and Climate change and what must be done to enable Nigeria feed her estimated 255 million population by 2030 despite ravages of climate change. “Farmers and fishermen have experienced challenges they have never faced before. With 60% of Nigerians in the agric sector, this is a threat, yet most of them still rely on yesterday’s knowledge.

She said Nigeria has about 40 million hectares of uncultivated arable land and all she needs is to provide the farmers with better information through research, training and improved seeds.

“A situation where we have challenges of climate change, having only 5% of farmers having access to improved seeds is a threat,” she stated.

Renewable Energy:

Azeenarh Mohammed on her part, focused on renewables.

“According to scientists, if the seven billion people in the world today all live the life of the global north, we will have the carbon footprint of 18 billion people so the challenge is to find a responsible way of living without destroying the planet.”

She wondered why despite Nigeria’s abundant fossil and renewable energy options, majority are still suffering from energy poverty which undermines their aspirations and lowers their quality of life.

“Instead of flaring our gas, we can turn it into electricity. Unfortunately, as at today, nobody knows who owns the associated gas that comes with oil. The new PIB is also silent on that.

“Figures from the Energy Commission (EC) shows that it costs about N200m to build a small hydro dam for a community that has a stream and a local government can afford to do that and give the people electricity 24/7 so why don’t they do it? Some of these local governments receive as much as N300m monthly,” she said.